Do you have an SMTP server (or exchange) set up in the Reporting Services config utility on the server? Is it on a reachable part of the network?

Can you set up a non-data-driven subscription email that sends successfully? I.e. make a really basic report and schedule it to email to yourself and check the "Reporting Services" to "email server" part is working?

The error log is a bit misleading, the unloaded appdomain error is just a symptom of the real problem, I think the later part of the log is the important part, and it looks like Reporting Services can't connect to your mail server.